FUTURE DLF Chairmans Speech

The key to progress is change. The past year has witnessed significant structural changes in the Indian economy that have altered the business paradigm in every sector, including the real estate and construction industry.

Due to several bold initiatives of the Government, the nation is on the cusp of a new era of economic activity and opportunity in which the key to success will be the ability to respond to change and overcome the challenges that inevitably arise during the period of transition.

As I have been frequently indicating to our stakeholders and patrons, during the past few years DLF has been strategically preparing for and indeed actively pressing for reformatory legislation and visionary policies pertaining to housing, construction and real estate development.

I am glad to share with you that your Company is now better equipped than many of our peers to navigate through the critical period of adaptation and course corrections that lie ahead. This has primarily been due to the foresight of your management team which has already put into place many of the internal structural changes and core business portfolio roadmaps that are best suited for survival and success in the changing scenario.

As you will recall, I have been persistently advocating for streamlining laws to bring about greater transparency, accountability and compliance in the real estate industry and to eliminate fly-by-night operators who have for decades been not only tarnishing the image of genuine developers but also seriously disrupting the housing market by defrauding home-buyers and end-users.

Your Company’s aspirations are in step with the new landmark legislation that has been enacted - the Real Estate (Regulation & Development) Act (RERA). Ideally, this would boost consumer confidence, pave the way for accelerated demand for housing products and also facilitate the flow of investments into the realty sector, from both global and Indian investors.

Similarly, other major reforms like GST and the law regarding Benami Transactions would make it incumbent upon hitherto non-compliant players to either comply or perish.

Moreover, although the shock decision to demonetize high value currency notes has evidently led to an initial slowdown in overall economic growth for a short-term, it will hopefully lead to more transparent housing sector growth in the long run.

While the various reform measures that have been introduced are salutary and indeed long overdue, the Government must be mindful of the necessity to ease the travails of transition, especially in a competitive market economy, by acting as an enabler and facilitator even while exercising strict regulatory control.

During the process of adjustment and adaptation, it is also essential to be open to refining some of the provisions of the new regulations and, in certain cases, rectifying some of the procedures and stipulations, in response to practical difficulties and industry feedback.

The truth is that the real estate sector has perennially been plagued by a plethora of archaic rules and burdensome bureaucratic formalities that hinder healthy growth. The ground reality of different States having complex and cumbersome regulations further hampers execution of projects in time and within the envisaged budget.

In my view, although the new legislation has many positive and necessary features that have been welcomed by builders and buyers alike, RERA regrettably does not adequately address certain crucial concerns faced by developers.

From the developers’ point of view, I would very briefly outline the aspects as - absence of a single window clearance mechanism; imposition of additional layers of approvals; and increased reliance on external capital to achieve high growth.

For allottees, too, there would be some grey areas including the likelihood of delays in delivery of apartments and consequent price escalation.

Legislative reforms, in my view, should be primarily aimed at bringing about a happy balance between supply and demand of real estate products. Along with ensuring transparency, the emphasis of any radical changes in policies and procedures should be on allowing market forces to create a mutually beneficial environment for developers, buyers and all stakeholders.

It is but natural that arriving at such a harmonious outcome will take awhile. It needs to be kept in mind that the real estate development sector in India has been passing through a variety of challenges compounded by continuing sluggish demand, lack of liquidity, regulatory pressure and piling up of inventory which have collectively created uncertainty about future growth.

I am confident that the Government, under the dynamic and far-sighted leadership of the Hon’ble Prime Minister, Shri Narendra Modi, will accord utmost priority to addressing the concerns and removing the shackles to enable rapid growth in real estate development, which I have always strongly believed will emerge as the next Sunrise Sector of the Indian economy.

For this to happen, the Government must act as an Enabler and Facilitator, not merely as a Regulator. The housing and construction industry, which supports over 250 ancillary industries, is the second-largest provider of jobs in the country after agriculture and is recognized as a powerful engine of growth -already contributing 7%-8% of India’s GDP, with the potential to grow to over 13% by 2028.

I am confident that DLF is eminently well-equipped to not only tide over the travails of transition but also be at the forefront of revival. Our unique business model cushions the impact of market down-cycles, with each division in product-mix - comprising homes, offices and retail, including malls and commercial complexes - functioning as a strategic business unit. Moreover, the sizable land resources your Company has accumulated over several decades would facilitate new project launches in prime locations at the appropriate time.

Shareholders will also be happy to know that the Company has successfully accomplished a major restructuring of its rental business with a game changing decision to sell Promoters’ stake in DLF Cyber City Developers Limited (DCCDL) to Singapore’s sovereign wealth fund GIC. The bulk of the sale proceeds would be reinvested in the Company to enable substantial reduction in pending debts without recourse to heavy external borrowings. The Company looks forward to partnering with GIC in taking the rental business to unprecedented heights.

As a responsible and ethical corporate entity, sustainable growth is high on our list of CSR programmes for the benefit of the community. The major CSR programmes implemented during the year aimed at contributing to national priorities like skill development, education, rural healthcare and community development. The Company has fully utilized 2% of its three year’s average profits for this purpose. DLF’s social outreach initiatives have won recognition at various National & International forums.

It is heartening to note that DLF’s sterling products have been awarded Platinum Certification (highest certification) and IGBC’s LEED India Platinum rating by the US Green Building Council and Indian Green Building Council, respectively.

I look forward to your continued support over the next few quarters as we face the challenges ahead with renewed confidence and determination to maintain our stellar role as the country’s foremost creators of high quality real estate products.

I take this opportunity to thank all our shareholders, business partners and valued customers for their unstinted support and trust over the last seven decades. On behalf of my fellow-directors and the entire DLF corporate family, I renew our pledge to remain committed towards building a New India.

With best wishes,

New Delhi (Dr. K.P. Singh)

25 August 2017 Chairman

Dear Shareholders,

The coming year marks a milestone in our company''''s history as a pioneer
in the field of real estate development. It was 70 years ago that our
revered founder Late Ch. Raghvendra Singh, displaying extraordinary
entrepreneurial courage and vision, ventured into the housing and urban
development business.

As we look back, we can justifiably take pride in our consistent track
record over the past seven decades of providing quality real estate
products and our pioneering role in the building of modern India. In
the years ahead, DLF will remain committed to continuing to strive for
excellence by providing world class housing and innovative and
technologically advanced urban infrastructure.

The immediate past has undoubtedly been a challenging period for the
country''''s economy and the real estate sector in particular has been
constrained by a variety of factors such as sluggish demand, liquidity
constraints, regulatory pressures and customer activism. Your Company
has been able to tide over the lean period adopting bold and innovative
strategies and certain crucial decisions.

The outlook for the year ahead remains positive. The Company expects
the rental business to continue strengthening. Gurgaon remains one of
the most preferred markets in the National Capital Region for quality
office spaces, group housing residential complexes and IT/SEZs. DLF
Cybercity has proved to be an attractive destination for premium office
space and superior infrastructure facilities.

Citizens of Gurgaon and stakeholders of the Company would be happy to
note that the 16-lane road, from the border of Delhi till the end of
the golf course (a distance of 8.3 km) with underpasses and flyovers
costing as much as Rs. 650 crore, is nearing completion. The project
has been jointly financed by your Company and Haryana Urban Development
Authority.

Stellar achievements such as the Mall of India and 14 msf of completed
assets made available to buyers for the second year running, signify
two basic factors i.e. fulfillment of commitments made to buyers and
your Company''''s ability to continue with such large deliveries even in
the face of years of general economic slowdown.

I am also happy to inform stakeholders that in compliance with CSR
guidelines, the Company has fully utilized 2% of its three year''''s
average profits in corporate outreach initiatives. In line with
national priorities, our CSR programmes are targeted at skill
development, rural healthcare, education and community development,
particularly of women in the villages in the vicinity in our areas of
operation. The DLF Foundation has increasing earned recognition for its
endeavour to create sustainable communities and transform lives.

I trust that the various path-breaking policies of the Government under
the far-sighted stewardship of our Hon''''ble Prime Minister Shri Narendra
Modi and effective implementation of innovative initiatives such as
''''Make in India'''', ''''Startup India'''', ''''Housing for All'''', ''''Smart Cities'''',
''''Digital India'''' and ''''REITs'''' would have a powerful positive impact on
the growth of the real estate sector, which is a major contributor to
GDP.

In this context, the passage of the Real Estate (Regulation &
Development) Act, 2016 is a welcome measure which will contribute in a
large measure to transparency, complete disclosures and full justice
and clarity to the buyers of real estate products. The Government
should ensure that the Act is implemented in such a manner that it
encourages the largest number of entrepreneurs to enter into real
estate industry and not curb the growth of the projects.

I am confident that such much-needed sectoral reforms would foster a
conducive business environment in which your Management would be able
to lead your Company on the path to rapid growth in the year ahead.

With best wishes,

Sincerely,

(Dr. K.P. Singh)

July 26, 2016 Chairman

Dear Shareholders,

Propelled by the new Government''s growth-oriented strategy the economy
as a whole is beginning to show distinct signs of revival. Largely due
to the deft handling of macro-economic issues and several positive
sector-specific policy initiatives, the industrial outlook has improved
overall.

As far as the real estate and urban housing sector is concerned, great
expectations have been aroused of a robust revival through the Prime
Minister''s announcement of visionary initiatives like ''Smart Cities''
and ''Housing for All''. Unfortunately, such expectations have not yet
been realised and the sector continues to face a plethora of
challenges, including rising input costs, high interest rates and
sluggish demand.

We need to ponder about why this vital sector, which is universally
acknowledged as a powerful engine of growth that contributes more than
7 per cent to the country''s GDP, is not reflecting the overall uptrend
being experienced by other sectors of the economy. The truth is that
housing and real estate development is a unique industry unlike any
other sector like manufacturing or services. It needs policies
specifically framed to cater to its special characteristics.

In my view, a major reorientation is called for in monetary policies
aimed at encouraging home ownership by providing home loans/mortgages
at affordable rates. This will not only revive demand and help achieve
the target of ''Housing for All'', but will also give a boost to
building activity. Secondly, the real estate development industry is
beset by antiquated laws and a host of regulations that are a major
impediment to growth.

It needs to be remembered that with linkages with more than 250
ancillary industries, this sector has a major multiplier effect on the
entire economy, creating jobs across the spectrum.

In order to realise the vision of ''Smart Cities'' and ''Housing for
All'', bold decisions and upfront reformations are needed in our
urbanisation policy, monetary policy in the form of low costs fi nance
for home buyers, availability of mortgage/reverse mortgage market and
above all in the regulatory framework for real estate sector. We need
to create an environment where people are encouraged to own a house at
the beginning of their career, but not at the retirement age.

Turning to your Company''s performance during the year under review,
consolidated revenues were Rs. 8,168 crore, a decrease of 17% from Rs.
9,790 crore in FY''14. Net profit after tax, minority interest and prior
period items was at Rs. 540 crore, a decline of 16% from Rs. 646 crore. The
EPS for FY''15 stood at Rs. 3.03 as compared to Rs. 3.65 for FY''14. Finance
cost decreased to Rs. 2,304 crore from Rs. 2,463 crore in FY''14. Your
Company''s Balance Sheet as on 31st March, 2015 reflected a healthy
position with a net worth of Rs. 29,168 crore. During the year, the
credit rating of your Company improved, with outlook changed from
''negative'' to ''stable''.

Your Company''s development business primarily focuses on the
development and sale of residential real estate which include plotted
developments, houses, villas and apartments of varying sizes and
integrated townships, with a focus on the high end, luxury residential
developments. As of 31st March, 2015, your Company had 46 msf of
development projects under construction.

Your Company''s lease business involves leasing of its developed
commercial and retail properties. One of the key objectives of its
lease business is to achieve returns from investments in its portfolio
properties within a targeted timeframe. Another key objective is to
achieve high occupancy rates for the leased portfolio properties. The
utilities and facility management business supports and complements the
lease business. As of 31st March, 2015, your Company''s lease business
with leasable area of approximately 29.4 msf, yielded annuity income of
approximately Rs. 2,200 crore. Your Company has always created quality
assets with highest safety norms.

Your Company''s commitment to contribute back to the communities has
created momentum towards ''inclusion'' and signifi cantly touched the
lives of marginalised people. Numerous programme initiatives have been
able to directly reach out to over 100,000 persons during the year.
Such programmes - Village Cluster Development Programme, Swachh Haryana
Campaign, the Nurturing Talent Programme, Skill-a-Million Programme,
have contributed significantly to the society. Further, your Company
contributed whole-heartedly and was amongst the first to reach to the
victims of the flood that struck Jammu & Kashmir in 2014.

I trust that the implementation of various path-breaking policies of
the new Government under the stewardship of Hon''ble Prime Minister and
the success of innovative initiatives such as ''Make in India'',
''Digital India'', ''100 Smart Cities'' and ''REITs'' would yield the
desired results and lead to rapid growth of the economy in the year
ahead.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com